Investing

For those who trade a lot...tax question

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  • Jan 29th, 2019 3:41 pm
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Member
Dec 1, 2008
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For those who trade a lot...tax question

For those of you who are trading a lot....50, 100, 200+ trades per year, etc., are you filling out your capital gains and losses line by line on your taxes, thus having potentially 100's of lines of proceeds/losses listed, or is there a more efficient way?
31 replies
Sr. Member
Feb 5, 2017
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I trade mostly the same security so one line for each security
Member
Jun 28, 2018
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Toronto
I've heard some people consolidate by symbol... so if they trade 10 x SLF , 10 x MFC, 10 x IFC, 10 x GWO, 10 x PWF, 10 x POW. They'll consolidate to 6 entries only....
The Distracted Investor

Dividends through quality companies 😃 Though I usually lose money with trades :facepalm:
Deal Fanatic
Feb 9, 2009
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alexcalvado wrote:
Jan 11th, 2019 8:05 pm
I trade mostly the same security so one line for each security
Are you buying and selling back within 30 days? Are you claiming cap losses if you do? If so CRA will not like it if they ever audit you...
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Feb 5, 2017
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Sanyo wrote:
Jan 11th, 2019 11:16 pm
Are you buying and selling back within 30 days? Are you claiming cap losses if you do? If so CRA will not like it if they ever audit you...
claiming cap loss against other security gain while following to the letter the law.
only two securities had losses in 2018 and were never rebought after.
Deal Addict
Jan 21, 2014
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Question about transferring security to TFSA/RRSP from non-registered account - If you have a again, you need to report capital gain despite you are not selling the security. if you have a loss, however, you can't claim the capital loss because you still hold the security. Is that statement correct?
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Aug 7, 2010
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mkl38s wrote:
Jan 12th, 2019 12:08 pm
Question about transferring security to TFSA/RRSP from non-registered account - If you have a again, you need to report capital gain despite you are not selling the security. if you have a loss, however, you can't claim the capital loss because you still hold the security. Is that statement correct?
Yes. That's why I prefer to sell in the non-registered account and claim the loss. Then buy a different but similar security in the TFSA to avoid the superficial loss (denied by CRA).
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Jul 15, 2009
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If you NETFILE, only the totals get transmitted (line 131 and 132). But make sure you have all the numbers in case they ask to see them.
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I've never been audited, so not sure if my method is correct or not.

I keep an accurate line by line log using Excel (same column headings as Sch 3). But on the Sch 3 itself, I write just one line. Call it Summary of Trades, then the total amounts.

When I used to paper file my taxes, I would attach a printout of the Excel. So they can see.

With e-tax submission, I don't/can't attach the Excel file, so I just keep it in my records, in case I get audited.

But in reality, unless you are trading as your only job/income, you should NOT be doing hundreds of trades each month/year.

Its about quality, not quantity. Try it, i have found, as my teachers have told me, my net profit from 10 quality trades actually beats my profit from 40 trades.

I'm doing well, these years, from my trades and I only did like 10 or so in 2018. I can easily type it line by line on Sch 3 now.
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Apr 23, 2009
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d-burn wrote:
Jan 11th, 2019 7:25 pm
For those of you who are trading a lot....50, 100, 200+ trades per year, etc., are you filling out your capital gains and losses line by line on your taxes, thus having potentially 100's of lines of proceeds/losses listed, or is there a more efficient way?
Just enter the total ACB and the proceeds in one line. Keep detailed records of everything FOREVER. I have records going back to 2002. CRA has never questioned me.

At big 4 accounting firms, no one does line-by-line or the tax preparation bill will run into thousands of dollars.

Do an excel spreadsheet which tracks ACB and also proceeds and file it away for future audit (if it ever comes).

CRA already has the proceeds information from T5008 so can easily check if you reported all proceeds accurately or missed transactions. It is only the ACB that they don't know about.
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Feb 13, 2017
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mkl38s wrote:
Jan 12th, 2019 12:05 pm
if you trade a lot, should it be reported as income and not capital gains anymore? like those folks in this thread
short-term-trading-thread-2175747/
You would think so, right?

But I was audited last year by the CRA for my trading years 2014, 2015, and 2016.

I had executed several hundred trades over those three years. All on my personal trading account.

CRA's conclusion? My trading gains and losses should be treated as capital gains and losses---and not income---for tax purposes.

Yes, an unexpected ruling by CRA but I'm not complaining.

So if there is a threshold where trading should be reported as income and not capital gains/losses, it must be a high threshold indeed.

EDIT: Removed unnecessary details.
Last edited by PhotoSmurf on Jan 14th, 2019 3:12 pm, edited 1 time in total.
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Sep 27, 2016
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What happens if you used margin account to buy stocks or a line of credit, can you deduct the interest cost against the capital gain? If you have a capital loss can you also claim the interest against the loss?
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May 11, 2014
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Jhopes wrote:
Jan 14th, 2019 1:25 pm
What happens if you used margin account to buy stocks or a line of credit, can you deduct the interest cost against the capital gain? If you have a capital loss can you also claim the interest against the loss?
You're confusing how carrying costs are credited to your taxes and it is very important to differentiate it properly. Interest costs can be deducted as a carrying costs when you have earned income(interest or divixends) on your investments. It is very important to make this distinction because if your gains on your investments are capital gains alone, your deduction may be denied.

In general, as long as your investments paid interest or dividends and you held those investments to collect this, you can claim carrying costs, even if you eventualy sell at a loss. Because of this, you need to be careful when claiming for carrying costs. Keep meticulous records if you buy shares that do pay dividends and ones that dont.

https://www.canada.ca/en/revenue-agency ... enses.html
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Feb 15, 2006
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PhotoSmurf wrote:
Jan 14th, 2019 1:03 pm
You would think so, right?

But I was audited last year by the CRA for my trading years 2014, 2015, and 2016.

I had executed several hundred trades over those three years. All on my personal trading account.

CRA's conclusion? My trading gains and losses should be treated as capital gains and losses---and not income---for tax purposes.

Yes, an unexpected ruling by CRA but I'm not complaining.

So if there is a threshold where trading should be reported as income and not capital gains/losses, it must be a high threshold indeed.

EDIT: Removed unnecessary details.
That's good to know. Just curious how many trades per year were there?

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